CA vs CFA - YouTube

Hello :) My name is Utkarsh Jain

and the purpose of this video presentation is to understand the

key differences between the two professional programs the first one is

Chartered Accountancy(CA) and the second one is Chartered Financial Analyst(CFA)

now I'm talking about CFA we are talking CFA which is

offered by the US Institute

now before I start with my presentation I would like to introduce

myself my name is Utkarsh and

I finished my Chartered Accountancy(CA)

and while finishing my CA I also finished

CFA so

I would like to share my personal experiences in terms of

Certain key important points

so the first one is the level of difficulty of CA vs CFA

exam

and over the years I have heard this question very frequently in fact every CA

student comes to us would typically ask how difficult is CFA compare to

CA so we will discuss about that

then we would understand the differences in terms of what costs or

what investment you would you have to incur in a CFA Program and CA

we would talk about if a CA students want to start CFA what would be the

appropriate time to do it

what are the work experience requirement in CFA

the average space

there fore CFA is as against the Chartered Accountant(CA)

and we would also talk about what kind of career opportunities exist

for CA and CFA combination

so let's start

the first question is the level of difficulty

now let's have a look at the

exam format of CFA so that things would be more clear

The Level I

and the Level II the 3 exams of CFA Level I, II and III

the first two are purely a multiple choice question based exams meaning of

which is there would be three options A, B, C and you'd be require to choose

appropriate one

In Level III in the morning you have to write constructed response are also

called as essays

which are different from what we are use to write short clips or

short answer to certain cases

and then again in the afternoon you have to write sixty multiple choice

question exams

now the exam format

creates a lot of difference

in the two exam in terms of how do you prepare for CA and how do you prepare for CFA

so i remember that while preparing for my CA final for that matter

even the enter exams

one was the require to remember a lot of things for example in your law or in your

taxation indirect taxation what ever might be subject you would be required

to remember a lot of things and reproduce them on the exam

so to a point where I felt that CFA was more often dependent on

CA was more on dependent on your ability to remember and

reproduce on the day of exam

as against this

with the exam format of CFA

this question exam paper is purely analytical so what do I mean by this is

so what I mean by this is

that with CFA you need to have that analytical bent of mind only mugging up

and reproducing on exam does not work with CFA exam

so what you need to know is

that if I know a concept how do I apply that concept in different scenarios

and can I use it in a realistic scenario and come to a solution to a problem

so if you feel that you are someone who's analytical bent of mind and

how do you decide that if you have like costing your CA syllabus

or if you like FM in CA syllabus or accounting then

probably would enjoy studying for CFA more

because a subject is somewhat similar to financial management in IPCC

SFM in CA final

so this was the one

so personally for me CFA exams and CFA studies much more

enjoyable than

CA studies I also felt them more easier than the level of

difficulty primarily because I was not required to remember a lot of things

but just to understand and move on

so this is your first part

now we would look at the costing part CA and CFA

now

CFA

assuming a average exchange rate and assuming that someone passes all the

exams in the first go

would cost of somewhere in the range of 1.5 lacs per annum

where as what i feel is CA is substantially cheaper program in terms of

the fees that would be giving to the institute

probably all your levels would be some where around 20 or 30 thousand

cumulative for all the three exams first likely higher than that

now the only difference what i feel is that the CA is a five year

program or 4.5 year program

where as CFA can be finished in one and half to 2 years

so there is no

there is no article-ship component directly

ok off course CFA also requires certain work experience but there is no articleship

the big difference

is that in CA you'd be doing article-ship of 3 years

now what happens is that in India this article is not paid very heavily so

let us say that you are being paid on an average 5k/month

so what it means for those 3 years your loosing a significant opportunity

cost

so even if you'll consider an average pay of 15k/month

that turns out to be

lesser ten thousand a month and that over the period of 3 years

so those CA direcly will not have a substantial cost attached

in terms of what you would give to the institute

but yes they would be a lot of significant opportunity cost involved

here

where as CFA with their work experience requirement do not ask you

do any article-ship

what they say is they want a 4 year relevant work experience

and what it would be mean is

that when you pass your Level I

you can take up a job this would be full placed job not an a article-ship which

means they will pay you and they will also respect you

because of which you would not

loose that opportunity cost here therefore CFA relatively

becomes a big cheaper because you recover that cost very very quickly

the second benefit is

it's a four-and-a-half year program

and the recognition comes when your CA final qualified

that means you pass all the 3 exams where as CFA that recognition comes in

smaller parts

so even if you pass Level I there is a ready-made job market available or you can put

that on your CV and look for good quality jobs in the market

so this was on the costing part

now let us say that if you are CA student

then what is the right time when you should start your studies

so I started my studies in the first year of articleship

and I felt that it really help me because CFA will help you to

look at things more analytically and logically

so ideally this have seen a lot of people

starting the CFA right when they start their articleship

you can start it anytime during articleship

their is a very strong synergy between CFA syllabus and CA Final syllabus

so if you

passed CFA Level I

you would feel really comfortable with CA final SFM

which is a subject that you have in finance and

also pass Level II then you would feel really good with SFM

as well as you would cover some-part of your accounting which is in the first group

so the appropriate time is to start

when you start your articleship but their is no such

gap or restriction you can do it whenever you feel you are ready for

writing the exams

we already discuss about work experience requirement

CFA require four year relevant work experience

so common question is articleship consider as a work

experience

the answer is

just a minute

the answer is no

CA articleship will not be required as the relevant work experience

but yes what is that 4 years when shoud you do it can be done before

you start CFA

During when you doing CFA or after you do CFA so

the good thing with CFA is I just said that their are 3 exams and

after having passed all the 3 you apply for CFA Chartered and that time you need

that CFA four year experience

but i've seen a lot of people in india who passed Level III exams and then

the recognition given by the employer to Level III qualified is as good

as CFA chartered holder

so it's like if you pass CA final your almost the CA in the similar fasion

if you pass

CFA Level III your almost the CFA

there is nothing that you can do to get that four year of work experience in 2 years

so that will come automatically with time

let's know talk about the fifth point which is average pays for CFA

and CA

and this is the most common question and also the most difficult to answer

the reason being that it really depends on what industry what verticle to decide to

work-in

now my personal or individual observation is that a pays in investment

banking substantially higher than any other industry

so if you are a chartered financial analysts and if you're working in areas

if your i banker working any of this

then you would be substantially higher

than what is on an average been paid to fresher chartered accountant

but off course it very significantly on individual and also on what sector

that you work

now

the final question is that career opportunities

and what i feel is

that I titled my presentation

we called it as CA vs CFA

but probably what I feel is the correct title for this should have in

CA + CFA combination

and why do I say this is

a chartered accountant would make you extremely strong in

areas like accountancy

it would make you really strong with taxasion it would make you really

strong with auditing

and it would give you some other knowledge of loss right you have some

securities laws in business lows

where as CFA wouldn't it's not a India specific program so it wouldn't

talk about Indian taxation %

it doesn't cover accounting so much in dept it is got financial reporting and

analysis which is step of the accounting

so CFA will make you extremely strong with financial concepts

where generaly I feel CA would lack

in terms level of Depth

and analytical approach

so CA + CFA combination can gives you best of both the words

how it helps is let us say if I am an employer and

i'm looking for a profile on equity research analyst

then what I would want is

I would want someone would understand and indian annual report very much in

dept you should understanding inter-crises of it

plus I would also want someone who can analyze and focus and

financial part of it

so that's where CA and CFA combination fits in perfectly

or another example is let us say I want to recruit someone for due diligence

profile right so there is a amended due diligence

now what I would want someone who would understand the financed part of it and

also the legal aspects of it

and that's why again CFA fits in perfectly

so what CFA would do for chartered accountants it would open

up a lot of spectrum of opportunities

which otherwise CA would not find a very easily so

the concept or the on topics which is discussed on my personal opinion and the

opening might vary from different person to person

this is Utkarsh Jain and thank you very much for your time.